SYNAVANT Reports Second-Quarter 2002 Results.Business EditorsATLANTA--(BUSINESS WIRE)--Aug. 1, 2002 EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become of $0.7 Million in Line With Guidance Range SYNAVANT Inc. (Nasdaq:SNVT SNVT Standard Network Variable Types SNVT Short No Voltage Tester ), the global pioneer of pharmaceutical Customer Relationship Management (CRM (Customer Relationship Management) An integrated information system that is used to plan, schedule and control the presales and postsales activities in an organization. ) solutions for the biopharmaceutical and healthcare industries, today reported revenue of $43.6 million and earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
"I am pleased to report another quarter of EBITDA profit despite the challenges faced by many companies in our market," commented Wayne Wayne, city (1990 pop. 19,899), Wayne co., SE Mich., a suburb of Detroit, on the Lower Rouge River; inc. as a village 1869, and with surrounding areas as a city 1960. It has automobile and aircraft industries and other varied manufactures. P. Yetter, SYNAVANT's Chairman and Chief Executive Officer. "Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses was positive for the third quarter in a row and our total cash balance was also up during the quarter. I expect significant investments and leadership appointments made by the Company during the first half of this year to drive results in the second half of 2002," Yetter added. Second-Quarter Results EBITDA increased $1.7 million to $0.7 million for the second quarter, reflecting improvement compared with minus $1.0 million, excluding restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and other one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charges, a year earlier. Cash EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. for the quarter was $0.03 per share, an improvement of $0.05 compared with a year earlier. Revenue totaled $43.6 million in the second quarter, a 7 percent decrease from second-quarter 2001, primarily due to lower license fees in the US. License revenue was down $2.9 million and software services revenue was down $0.2 million due to fewer customer sales force expansions versus a year ago. A net loss of $1.7 million, or $0.11 per share was reported for the second quarter of 2002 compared with a $6.2 million net loss or $0.42 per share for the second quarter of 2001. Components of depreciation and amortization for the second-quarter 2002 were acquired software amortization of $0.4 million and other depreciation of $1.5 million. In addition, FAS 86 software amortization of $0.6 million for the quarter is reflected in operating costs operating costs npl → gastos mpl operacionales and has not been added back when deriving EBITDA. Amortization of goodwill of $2.9 million in the second quarter of 2001 did not recur in 2002 due to the suspension of amortization on goodwill balances as of January January: see month. 1, 2002 in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the new accounting standards. "We maintained our targeted profitability this quarter despite a decline in revenue," said Clifford Clif·ford , Clark McAdams 1906-1998. American lawyer and politician who, as chief counsel (1946-1950) to President Harry S. Truman, influenced U.S. foreign policy. During the Vietnam War he served as U.S. secretary of defense (1968-1969). A. Farren Jr., SYNAVANT's Senior Vice President and Chief Financial Officer. "A more profitable product mix and continued focus on our cost structure has enabled us to deliver $0.7 million of EBITDA for the quarter," Farren added. Six-Months Results EBITDA, excluding restructuring and other one-time charges, increased $3.8 million to $1.0 million for the first six months of 2002. Cash EPS for the first six months was $0.07 per share. Revenue totaled $88.6 million for the first six months of 2002, down $2.2 million or 2% versus a year ago. Similar to the results for the second quarter, a slow-down in customer sales force expansions was the main driver of the decline. Excluding the impact of currency, revenue declined by 3%. A net loss of $3.7 million, or $0.24 per share was reported for the first six months of 2002 compared with a $15.9 million net loss or $1.07 per share for the first six months of 2001. Components of depreciation and amortization for the first six months of 2002 were acquired software amortization of $0.8 million and other depreciation of $2.9 million. In addition, FAS 86 software amortization of $1.2 million for the first six months of 2002 is reflected in operating costs and has not been added back when deriving EBITDA. Amortization of goodwill of $5.9 million in the first six months of 2001 did not recur in 2002 due to the suspension of amortization on goodwill balances as of January 1, 2002 in accordance with the new accounting standards. Restructuring and Other One-Time Charges No further restructuring actions were taken in the quarter and as a result no charges were recorded. Cash payments associated with charges taken in 2001 totaled $1.5 million during the first six months of 2002. Constant-Dollar Results Recent fluctuations in currency rates have positively impacted SYNAVANT's results. Revenue was positively impacted by $0.9 million in the second quarter of 2002 compared with the second quarter of 2001. On a constant-dollar basis, which excludes the impact of foreign currency exchange, revenue in second-quarter 2002 was 9 percent below the year-earlier quarter. Balance Sheet Highlights At June 30, 2002, SYNAVANT's cash and cash equivalents totaled $11.8 million, an increase of $2.2 million compared with the year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2001 balance, largely due to working capital improvements and the impact of foreign currency. Operating activities generated cash for the third quarter in a row. Net cash from operating activities during the second quarter of 2002 totaled $2.2 million and $4.5 million year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. . Financial Outlook "The constant-dollar revenue decline of 9 percent for the quarter was below our expectations and will be a challenge to recover from in the second half of 2002," commented Farren. "Revenue for the full-year 2002 is expected to grow between 0 and 3 percent on a constant dollar basis. Full-year 2002 EBITDA, excluding restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , is expected to be between $3.0 million and $6.0 million and cash EPS is expected to be between $0.20 and $0.40. Revenue for the third quarter of 2002 is expected to be between $42.0 million and $44.0 million and EBITDA, excluding restructuring and other one-time charges, is expected to be between break-even and $1.5 million," Farren concluded. Operating Highlights During the second quarter 2002, SYNAVANT's business wins continued to span its core business areas of technology, data, services and Interactive Marketing solutions in the Americas A·mer·i·cas , the See America. , Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and Pacific
Rim Pacific Rim, term used to describe the nations bordering the Pacific Ocean and the island countries situated in it. In the post–World War II era, the Pacific Rim has become an increasingly important and interconnected economic region. . SYNAVANT continued to make progress in the CRM area by winning its
first contract for a fully integrated Siebel For the tech company, see .Siebel, originally Flugzeugbau Halle, was a German aircraft manufacturer in Halle an der Saale. Siebel aircraft included:
Schering AG was a research-centered pharmaceutical company founded in 1851 that merged with Bayer in December 2006. AG in Portugal Portugal (pôr`chəgəl), officially Portuguese Republic, republic (2005 est. pop. 10,566,000), 35,553 sq mi (92,082 sq km), SW Europe, on the western side of the Iberian Peninsula and including the Madeira Islands and the Azores in the . More usually, companies request just one component of the Siebel multi-channel See multichannel. suite at a time, however Schering AG's requirement is for an application that integrates multiple channels and platforms: handheld handheld: see personal digital assistant. , ePharma, eClinical and Call Center. The contract includes the specification, design, implementation and ongoing support of the integrated CRM application. SYNAVANT also won a services contract to support Siebel ePharma for the largest pharmaceutical sales force in the Netherlands Netherlands (nĕth`ərləndz), Du. Nederland or Koninkrijk der Nederlanden, officially Kingdom of the Netherlands, constitutional monarchy (2005 est. pop. 16,407,000), 15,963 sq mi (41,344 sq km), NW Europe. and consulting contracts with two top-ten pharmaceutical companies in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. for their Siebel ePharma implementations. In addition, SYNAVANT's 1,800-user Siebel ePharma implementation for a major pharmaceutical company in the US is almost complete, with the customer expressing its full satisfaction with the quality of the implementation. This success endorses the value of SYNAVANT's Implementation Toolkit(TM) that was deployed in this project. The Implementation Toolkit(TM), launched formally today by SYNAVANT, enables SYNAVANT to deliver a high quality CRM implementation while lowering the overall cost of CRM ownership for customers. SYNAVANT's Interactive Marketing business completed its move of office-based staff to new office facilities in Wayne, NJ with its warehouse operation scheduled to move to new premises in Totowa, NJ during the third quarter. Both facilities meet the needs of this business more appropriately and will support future growth at comparable cost. The Interactive Marketing and consulting businesses continued their progress in the second quarter 2002. SYNAVANT was selected as a preferred provider for physician call center services to one of the top-ten pharmaceutical companies in the US. SYNAVANT also won a CRM readiness consulting project with a major Japanese pharmaceutical company and several contracts for physician influence network and market research projects in Europe, Canada and the US. In addition to extending its range of Interactive Marketing services in several European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. countries, SYNAVANT launched three new Interactive Marketing services in the US - Value Script(SM), Marketing Optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. Analysis(SM) and Thought Leader Influence Network(SM). Value Script(SM) is a physician-controlled discount card service entitling patients to free or reduced cost drugs, or discounts on other health-related items, upon redemption of the card value when filling their prescriptions. SYNAVANT's Marketing Optimization Analysis(SM) tool deploys complex analytical software Analytical software is software that is designed specifically for and development of a particular environment or object. to discover statistically robust cause-and-effect relationships between a pharmaceutical company's marketing spend and prescriber pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). behavior. Thought Leader Influence Network(SM) is a solution that addresses one of the key challenges for pharmaceutical companies by enabling them to identify the most influential physicians and helping them understand which physicians are communicating with these influencers. Operating Outlook "Previously I have said that I expected some significant CRM decisions to be made by pharmaceutical companies in mid-to-late summer. While not all decisions have yet been made, it is appropriate that I share with you SYNAVANT's current perspective for our software services business," said Yetter. "Four clients in the US have made decisions to select competitive vendors for their CRM or sales force automation Automating the sales activities within an organization. A comprehensive SFA package provides such functions as contact management, note and information sharing, quick proposal and presentation generation, product configurators, calendars and to-do lists. projects. We do not expect these decisions to have a significant impact on our 2002 revenue projections. However, although we are not issuing formal guidance at this time for SYNAVANT's 2003 financial performance, this will result in pressure on the technology and support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services components of our business next year. While in some cases the timing of customer transition plans is not yet certain, we project that in the US approximately $25 million to $30 million of 2002 software services revenue will not recur in 2003. These customer transitions do not impact our Interactive Marketing business. We have actions in place to develop new sources of revenue and ensure our margins are maintained or improved," Yetter stated. "Looking ahead, we have identified further pharmaceutical CRM opportunities in the US, Europe and Pacific Rim and are engaged in an intense sales campaign Noun 1. sales campaign - an advertising campaign intended to promote sales ad blitz, ad campaign, advertising campaign - an organized program of advertisements sales campaign n → campaña de venta to position SYNAVANT as the best partner for implementation and post-implementation services," Yetter continued. "In addition we are seeing some positive trends in our Interactive Marketing business, with excellent increases in our pipeline activity that indicate that this business - especially in the US - is poised for significant growth," concluded Yetter. A discussion of second-quarter performance will be Webcast live on August 1, 2002 at 4:30 p.m. ET and can be accessed via http://www.synavant.com. About SYNAVANT SYNAVANT Inc. guides biopharmaceutical and healthcare companies globally to greater business success by accelerating the adoption of advances in healthcare around the world. SYNAVANT accomplishes this by designing, building and supporting a wide range of knowledge-based solution sets, that bring together leading-edge technology, proven data management competence, a full range of specialist services and over 30 years of healthcare expertise. Its comprehensive, global solutions include pharmaceutical Customer Relationship Management (CRM) and eBusiness applications, interactive marketing, server and database management, dedicated local helpline helpline Noun a telephone line set aside for callers to contact an organization for help with a problem helpline n → teléfono de asistencia al público support, training, telemarketing telemarketing, the practice of selling goods or services to customers by means of the telephone or of surveying consumer preferences in telephone conversations. , sample management, and product-recall services. SYNAVANT is headquartered in Atlanta, GA, USA and has offices in 22 countries. Additional information is available at http://www.synavant.com. Implementation Toolkit(TM), Value Script(SM), Marketing Optimization Analysis(SM) and Thought Leader Influence Network(SM) are trade and service marks of SYNAVANT Inc. Siebel is a trademark of Siebel Systems Siebel is a brand name of Oracle Corporation. Siebel Systems, Inc., founded by Thomas Siebel in 1993, was principally engaged in the design, development, marketing and support of CRM applications. , Inc. and may be registered in certain jurisdictions. All other product and company names mentioned are the property of their respective owners and are mentioned for identification purposes only. This news release includes forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. All statements other than statements of historical fact are forward-looking, which can be identified by the use of words such as "may," "will," "expect," "anticipate," "estimate," "believe," "continue" or other similar words. Such forward-looking statements are based on management's current plans and expectations, and are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: risks associated with competition from other providers of customer relationship management solutions; customer decisions favoring favoring an animal is said to be favoring a leg when it avoids putting all of its weight on the limb. A part of being lame in a limb. competitor products, solutions and/or services; the ability to obtain additional financing on satisfactory terms to meet future capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. ; the loss of key personnel; failure to introduce new or enhanced products in a timely manner; defects in our products and delays related to market adoption of our software; consolidation of the pharmaceutical industry; fluctuations in quarterly and or annual operating results that may adversely affect the market price of our common stock; operating on a global basis; the ability to protect our intellectual property; product infringement The encroachment, breach, or violation of a right, law, regulation, or contract. The term is most frequently used in reference to the invasion of rights secured by Copyright, patent, or trademark. claims; the ability to identify, consummate To carry into completion; to fulfill; to accomplish. A Common-Law Marriage is consummated when the parties live in a manner intended to bring about public recognition of their relationship as Husband and Wife. and integrate acquisitions, alliances and ventures on satisfactory terms; the ability to develop new or advanced technologies, systems or products; the ability to successfully maintain historic effective tax rates; and regulatory, legislative and enforcement initiatives. These risks and uncertainties are not intended to be exhaustive and should be read in conjunction with other cautionary statements discussed in more detail in the Company's filings with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. . EBITDA is defined by the Company as operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. or loss before depreciation, amortization, and restructuring and other one-time charges. EBITDA is not a measure calculated in accordance with Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting and may not be comparable to similarly titled measures presented by other companies.
Table 1
SYNAVANT Inc.
Statement of Operations
Three Months Ended June 30, 2002
(unaudited, dollars in millions except per share)
% Constant $
2002 2001 Change Growth
---------- ---------- ---------- ----------
Revenue
Software Fees $ 1.1 $ 4.0 (73)% (74)%
Software Services 22.1 22.3 (1) (3)
Interactive Marketing 20.4 20.4 0 (2)
---------- ----------
Total Revenue 43.6 46.7 (7) (9)
Operating Costs (33.0) (36.8) (10)
Research & Development (1.6) (2.1) (24)
Selling &
Administrative Costs (8.3) (8.8) (6)
Spin Related Costs 0.0 (0.4)
---------- ----------
EBITDA 0.7 (1.4)
Depreciation &
Amortization(a) (1.9) (5.3) (64)
---------- ----------
Operating Loss $ (1.2) $ (6.7)
Other Expense, Net 0.2 0.3
---------- ----------
Loss Before Provision
for Income Taxes (1.0) (6.4)
(Provision) Benefit
for Income Taxes (0.7) 0.2
---------- ----------
Net Loss $ (1.7) $ (6.2)
========== ==========
Loss Per Share
(Basic and Diluted) $ (0.11) $ (0.42)
Average Shares
Outstanding (Basic
and Diluted) 15.10 14.91
(a) 2001 results include $2.9 million of Goodwill Amortization,
which, in accordance with newly issued accounting guidance SFAS 142,
ceased as of January 1, 2002.
Table 2
SYNAVANT Inc.
Statement of Operations(b)
Six Months Ended June 30
(unaudited, in millions except per share)
Constant $
Constant
% Portfolio
2002 2001 Change Growth
---------- ---------- ---------- ----------
Revenue
Software Fees $ 2.5 $ 7.2 (65)% (65)%
Software Services 43.0 43.8 (2) (2)
Interactive Marketing 43.1 39.8 8 8
---------- ----------
Total Revenue 88.6 90.8 (2) (3)
Operating Costs (68.1) (71.0) (4)
Research & Development (3.5) (4.4) (20)
Selling &
Administrative Costs (16.0) (18.2) (12)
Spin Related Costs 0.0 (0.6)
---------- ----------
EBITDA 1.0 (3.4)
Depreciation &
Amortization(b) (3.7) (10.7) (65)
---------- ----------
Operating Loss $ (2.7) $ (14.1)
Other Expense, Net 0.0 0.2
---------- ----------
Loss Before Provision
For Income Taxes (2.7) (13.9)
Benefit (Provision)
for Income Taxes (1.0) (2.0)
---------- ----------
Net Loss $ (3.7) $ (15.9)
========== ==========
Loss Per Share
(Basic and Diluted) $ (0.24) $ (1.07)
Average Shares
Outstanding (Basic
and Diluted) 15.08 14.89
(b) 2001 results include $5.9 million of Goodwill Amortization,
which, in accordance with newly issued accounting guidance SFAS 142,
ceased as of January 1, 2002.
Table 3
SYNAVANT, Inc.
Summary Balance Sheet
(unaudited, dollars in millions)
June 30, December 31,
2002 2001
----------------- ----------------
Assets
Current Assets
Cash and Cash Equivalents $ 11.8 $ 9.6
Accounts Receivable, Net 39.8 39.8
Other Current Assets 5.8 6.1
----------------- ----------------
Total Current Assets 57.4 55.5
Long-Term Notes Receivable 1.0 1.0
Property, Plant and Equipment, Net 12.1 11.2
Computer Software, Net 4.9 7.4
Goodwill, Net 41.2 41.2
Other Long-Term Assets 2.2 2.0
----------------- ---------------- --------------------- --------------------
TOTAL ASSETS $ 118.8 $ 118.3
================= ================
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable $ 9.2 $ 9.5
Accrued Restructuring 3.3 4.8
Accrued Income Taxes 3.2 1.9
Deferred Revenue 9.2 8.4
Accrued & Other Current
Liabilities 15.8 13.3
----------------- ----------------
Total Current Liabilities 40.7 37.9
Other Liabilities 10.9 10.2
----------------- ----------------
TOTAL LIABILITIES $ 51.6 $ 48.1
================= ================
Minority Interest -- --
Stockholders' Equity 67.2 70.2
----------------- ----------------
--------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 118.8 $ 118.3
================= ================
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